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Independent Resources raises £800,000 to get Egypt venture rolling

East Ghazalat is seen as a way to generate cashflow.

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Independent Resources is to consolidate its shares to facilitate the placing

Independent Resources (LON:IRG) has launched a placing to raise £800,000 to fund its recent joint venture with fellow AIM–lister Nostra Terra (LON:NTOG).

The venture acquired an interest in the East Ghazalat producing concession in Egypt’s Western Desert for a total US$3.5mln. 

An initial consideration of US$1.0mln is payable at completion with the balance due in a year‘s time.

East Ghazalat is seen by both companies as a way to generate cashflow, while also having significant potential exploration upside.

The venture will get some 440 barrels of oil production and just over 1mln barrels of proved and probable (2P) reserves – meaning each partner will have 220 bopd and about 500,000 barrels of reserves.

Independent added it had been reluctant to raise more funds through a share issue before securing an interest in a producing asset. 

Now after the East Ghazalat deal it wants to strengthen its finances for both that project and any follow-on investments both in Egypt or elsewhere in North Africa.

Independent Resources is also to consolidate its shares to facilitate the placing, which will be at 0.6p per share, a 17% discount to the market price yesterday.

Shares eased 3% to 0.7p.

Quick facts: Echo Energy PLC

Price: 0.385 GBX

AIM:ECHO
Market: AIM
Market Cap: £3.11 m
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